While I believe that the Fiduciary rule will be delayed, and ultimately changed to be of value and not harmful, the "Fiduciary/Best Interest concept" is here to stay and our business will never be the same. And you know what? That is okay. As long as we are not crushing an industry, blocking out consumers and adding billions of dollars of lost revenue to one of the finest industries in the world... the insurance industry.
So, why will things never be the same? Let's read on…
"The Genie is out of the bottle" states Phyliss Borzi the Chief architect of the Dept of Labor's ruling in this area. She goes on to say in the piece in the WSJ Feb 6th issue, "The market has already spoken. The Best Interest is what they are asking for and what consumers are now beginning to expect. Nothing we did was wasted."
And, yes... there has been so much press regarding this that I have neighbors that are now asking me questions about this new proposed rule. (please note that I did not say this "new proposed standard "as we have been acting this way forever). But we have been painted as high commission chasing, get a free trip, do anything to get the money industry.
Well, I am a little honked off and I am sure you are too. So, bottom line, they may delay and ultimately roll back this ruling, but "Baby Boomers" read the papers and watch the news and they know about fiduciary sales. So, how are you going to respond? Let's look:
Many firms like Merrill Lynch are not going to back down. They got rid of commissions on qualified money and they are going to implement this rule regardless. They like this, as they will want to "rip your lips off" in competition and expose you as a commission sales person. But hold on… Morgan Stanley, Wells Fargo, LPL Financial and others are NOT removing commission products. That is pretty good company. Here are the tough questions you will be asked... and I have a few answers:
These questions were suggested by Daisy Maxey who wrote the column, “Fiduciary Rule Changes: What investors Need to Know"
"How can Investors protect themselves without a fiduciary rule?"
Her answer is, "Investors should ask if their advisor is a fiduciary, required by law to act in their best interests” (she continues that all RIAs that charge fees are fiduciaries).
My answer: If you are asking me if I act under a "best interest rule”, meaning I place my clients best interest before mine, the answer today is yes, and the answer my entire life has been yes. This writer goes on to say "make sure they are getting advise from a financial advisor and not a salesperson masquerading as a financial advisor." So, what are you supposed to do? Keep reading…
"Get some real credentials."
I have my Chartered Life Underwriters (CLU) designation from The American College in Brynn Mawr, PA. Yes, I have my undergraduate degree from Ball State, but I took an additional 30 hours of undergraduate credit to obtain this designation. I also have one of the most highly touted retirement designations. It is the CRC, The certified Retirement Counselor designation from The International Foundation for Retirement Education at Texas Tech. This designation, according to a Wall Street Journal article, is one of the three best credentials when looking for a retirement planner... hey, that's me.
My son Nick Ohlson, who runs our Chicago office, also has the CLU but he also has the Chartered Financial Consultant(ChFC) designation from The College.
Joe Ohlson, Managing Director of our Carmel, Indiana office has his LUTCF, Life Underwriter Training Council Fellow, also from the American College and will be taking his CRC exam in July. By the way, The Ohlson Group co-ops the CRC class, books and testing.
So, time to get a credential that counts. Anything else you say? Why yes, one more thing…
You need to have a proper client assessment before you can give a “best Interest" recommendation.
We have that with AssessBest. this is the DOL-or-not, best retirement sales platform that is also compliant, suitable and in everyone's best interest. Your prospects and clients will feel comfortable and impressed when you treat them with the utmost dignity and respect when discussing their retirement needs. And (as long as I am selling), we will buy that for you, too. So, time to get into the game. It is a new day, with new challenges but the best opportunities since I entered this business many years ago. I would love to hear your thoughts on this topic. Drop me a note and get in on the blog.
Until next time... good selling!